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Orange Juice Nearing Bear Market; Coffee, Sugar, Cotton Decline

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June 26 (Bloomberg) -- Orange-juice futures fell for an eighth straight session, approaching a bear market, on signs of slowing demand as investors shift from commodities to equities. Coffee, sugar and cotton declined, while cocoa advanced.

The Standard & Poor’s GSCI Spot Index of 24 commodities dropped for the first time this week, led by metals and agriculture. The S&P 500 Index of stocks rose to the highest since June 20 on speculation that the Federal Reserve will maintain stimulus to fuel economic growth. U.S. retail-sales of orange juice fell 1.3 percent to 39.89 million gallons (151 million liters) in the four weeks ended June 8, from a year earlier, the Florida Department of Citrus reported June 24.

“The consensus is the U.S. economy is turning a corner, and we had some weak demand reports for orange juice,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in a telephone interview. “People are taking their money out of commodities and putting it into stocks.”

Orange juice for September delivery tumbled 4.8 percent to close at $1.278 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest decline for a most-active contract since March 1. The commodity has dropped 13 percent since June 14, capping the longest slump since July. Prices are down 17 percent from this year’s closing high on May 30, nearing the 20 percent threshold for a bear market.

Earlier today, orange juice touched $1.248, the lowest for a most-active contract since March 8. Trading was 229 percent above the average for this time in the past 100 days, according to data compiled by Bloomberg.

Prices rallied to a 13-month high of $1.5575 on May 30 as citrus disease and a drought eroded crop forecasts for Florida, the world’s second-largest producer.

Coffee, Sugar

Arabica-coffee futures for September delivery dropped 1.7 percent to $1.1845 a pound on ICE, the biggest decline since June 20, when prices fell to the lowest in almost four years.

Raw-sugar futures for October delivery slid 0.1 percent to 17.33 cents a pound on ICE, the first decline in four sessions. Yesterday, prices reached 17.49 cents, the highest for a most-active contract since May 13.

Cotton futures for December delivery slumped 1.5 percent to close at 83.7 cents a pound, the seventh decline in eight sessions.

Cocoa futures for September delivery rose 0.1 percent to settle at $2,165 a metric ton.

To contact the reporter on this story: Marley DelDuchetto in Chicago at mdelduchett2@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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